Tags: Pimco | Threat | Sovereign | Debt | Crisis

Pimco: Threat of Sovereign Debt Crisis Underestimated

Thursday, 18 Mar 2010 03:25 PM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Governments, investors and economists don’t realize the full extent of the havoc that the sovereign debt crisis can wreak around the world, says Pimco CEO Mohamed El-Erian.

“Our sense is that the importance of the shock to public finances in advanced economies is not yet sufficiently appreciated and understood,” he says.

“Yet, with time, it will prove to be highly consequential. The sooner this is recognized, the greater the probability of being able to stay ahead of the disruptions rather than be hurt by them,” he recently wrote in the Financial Times.

For now, experts are focusing narrowly on Greece, El-Erian explains.

“Down the road, it will be recognized for what it is: a significant regime shift in advanced economies with consequential and long-lasting effects.”

To help deal with the crisis, everyone must keep in mind several points, he says.

• This is just the latest disruption to balance sheets.

• The crisis blurs the distinction between developed and emerging economies.

• Adjustment will come. The question is how orderly it will be.

• The global dimensions of the crisis complicate each country’s response.

• Expect slow reaction from the public and private sectors.

Former Federal Reserve Chairman Alan Greenspan says the turmoil may soon spread to the United States, thanks to our exploding budget deficit and debt burden.

"History tells us that great powers when they've gotten into very significant fiscal problems have ceased to be great powers," he told NBC.

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

New Laws Unleash Pot Entrepreneurs

Friday, 18 Apr 2014 12:21 PM

Colorado — the home of legalized marijuana — is experiencing a birth of stoner entrepreneurs. Or maybe that should be en . . .

Pa. Can't Afford to Lose Gov. Corbett

Thursday, 17 Apr 2014 13:33 PM

Be careful, Pennsylvania people. You can't afford to blow it this fall. Your great state is, I'm sorry to say, already n . . .

Overtaxed Californians Feel the Pinch

Wednesday, 16 Apr 2014 10:40 AM

Columnists live for the day when they have a simple, clear-cut, and reasonable answer to a problem vexing fellow America . . .

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved